Hedge Funds Are Piling Into Chevron Corporation (CVX)

We at Insider Monkey have gone over 873 13F filings that hedge funds and prominent investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of June 30th. In this article, we look at what those funds think of Chevron Corporation (NYSE:CVX) based on that data.

Is Chevron Corporation (NYSE:CVX) a buy, sell, or hold? The best stock pickers were buying. The number of bullish hedge fund positions increased by 9 in recent months. Chevron Corporation (NYSE:CVX) was in 50 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 56. Our calculations also showed that CVX isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 185.4% since March 2017 and outperformed the S&P 500 ETFs by more than 79 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

Donald Sussman of Paloma Partners

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. With all of this in mind we’re going to take a gander at the key hedge fund action regarding Chevron Corporation (NYSE:CVX).

Do Hedge Funds Think CVX Is A Good Stock To Buy Now?

At the end of June, a total of 50 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 22% from the previous quarter. On the other hand, there were a total of 50 hedge funds with a bullish position in CVX a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

More specifically, Berkshire Hathaway was the largest shareholder of Chevron Corporation (NYSE:CVX), with a stake worth $2422 million reported as of the end of June. Trailing Berkshire Hathaway was Fisher Asset Management, which amassed a stake valued at $631.6 million. Diamond Hill Capital, Citadel Investment Group, and Millennium Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Stamos Capital allocated the biggest weight to Chevron Corporation (NYSE:CVX), around 4.23% of its 13F portfolio. Levin Easterly Partners is also relatively very bullish on the stock, designating 2.29 percent of its 13F equity portfolio to CVX.

Now, specific money managers have been driving this bullishness. Tudor Investment Corp, managed by Paul Tudor Jones, initiated the most outsized position in Chevron Corporation (NYSE:CVX). Tudor Investment Corp had $16.7 million invested in the company at the end of the quarter. Donald Sussman’s Paloma Partners also initiated a $6.7 million position during the quarter. The following funds were also among the new CVX investors: Michael Gelband’s ExodusPoint Capital, Alec Litowitz and Ross Laser’s Magnetar Capital, and Matthew Hulsizer’s PEAK6 Capital Management.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Chevron Corporation (NYSE:CVX) but similarly valued. These stocks are AbbVie Inc (NYSE:ABBV), Thermo Fisher Scientific Inc. (NYSE:TMO), Merck & Co., Inc. (NYSE:MRK), Broadcom Inc (NASDAQ:AVGO), Novo Nordisk A/S (NYSE:NVO), Danaher Corporation (NYSE:DHR), and Wells Fargo & Company (NYSE:WFC). All of these stocks’ market caps match CVX’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 69.6 hedge funds with bullish positions and the average amount invested in these stocks was $5447 million. That figure was $4273 million in CVX’s case. Wells Fargo & Company (NYSE:WFC) is the most popular stock in this table. On the other hand Novo Nordisk A/S (NYSE:NVO) is the least popular one with only 20 bullish hedge fund positions. Chevron Corporation (NYSE:CVX) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for CVX is 57.1. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 22.9% in 2021 through October 1st and surpassed the market again by 5.6 percentage points. Unfortunately CVX wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); CVX investors were disappointed as the stock returned 1% since the end of June (through 10/1) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.

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Disclosure: None. This article was originally published at Insider Monkey.